Thursday, December 31, 2009

You've probably heard it said that in Chinese, the word for "crisis" is composed from the words for "danger" and "opportunity". In the same presentation, you probably heard that there's no "I" in "TEAM". If you were skeptical of these attempts to extract wisdom from way language is written, you had good reason. The story about the Chinese word for crisis is not true. And even if it was true, it would be about as meaningful as the fact that the English word "SLAUGHTER" contains the word "LAUGHTER".

During my brief time working in "middle management", I was required to do "SWOT Analysis". SWOT stands for "Strengths, Weaknesses, Opportunities, Threats". As a planning exercise, it was quite useful, but it became comical when used as a management tool. Everyone understood the fake Chinese crisis wisdom, and we all made sure that our threats were the same as our opportunities, and our weaknesses were also our strengths.

On this last day of the "0"s, I've been reading a lot of prognostication about the next ten years. It's very relevant to this blog, as I've been using it to help me think about what to do next. Some things are not too hard to imagine: the current newspaper industry will shrink to maybe 10% its current size; the book publishing will reshuffle during the transition to e-books; Google will become middle-aged. The SWOT analysis for these will be easy.

The SWOT analysis that I have trouble with is the one for libraries. What threats to libraries will arise? Will Libraries as we know them even exist in 10 years?

I've heard publishers say they believe that there will be no role at all for libraries in the developing e-book ecosystem. If that's not a threat, I don't know what is! On the other hand, there's the example of the Barnes and Noble e-book reader, the Nook, that has the intriguing feature of being able to read books without buying them while you're in the bookstore! If there's a role for brick and mortar bookstores in the e-book ecosystem, then surely there's a role for libraries.

In thinking about what roles libraries will play when all books are e-books, I keep coming back to a conclusion that sounds odd at first: the prospective role of libraries will be entwined with that of piracy in the e-book ecosystem.

While there are fundamental differences between e-book libraries and e-book pirates, there are important similarities. As I noted in my article on copyright enforcement for e-books, libraries have traditionally played an important role in providing free access to print books; e-book pirates have as their mission the provision of free access to e-books. For this reason, libraries and pirates would occupy the same "market space" in an e-book ecosystem. This is not to say that libraries and pirates would be direct competitors; it's hard to imagine pirate sites appealing to many of the people who patronize libraries.

So where is the "threat" to libraries? Think about how book publishers will need to respond to the threat of e-book piracy. I've argued that publishers should do everything they can to reward e-book purchases, but that addresses only the high price segment of the market. Public libraries address the low-price segment of the market, providing books to people with a low willingness or ability to pay for access, while still providing a revenue stream for the publishers. To keep pirates from capturing this market in the e-book economy, publishers will need to facilitate the creation of services targeted at this market.

An analogy from the video business is appropriate here. DVDs can only satisfy part of the digital video market. Though it's taken a while for the studios to realize it, in order to effectively compete with video pirates, the movie studios need to have digital offerings like hulu.com that offer movies for free.

What will the free e-book services look like? Perhaps they'll be advertising sponsored services like Google Books. Perhaps they'll be publisher- or genre-specific subscription services that provide people a "free book" experience at a fixed monthly price. Unfortunately, it seems a bit unnatural that publishers would turn to libraries to create the sort of services that could replicate the role of the library in the e-book ecosystem- libraries just aren't entrepreneurial in that way.

Somehow I don't think that book publishers will warm to a "Napster for e-Books", even if it was labeled "e-Book Inter-Library Loan".